Baku, Azerbaijan, Jan.6
By Leman Zeynalova – Trend:
Non-OPEC countries such as Russia will unlikely meet their agreed targets of oil production cut, Guy Caruso, Senior Adviser, Energy and National Security Program at the Center for Strategic and International Studies (US), told Trend Jan.6.
He pointed out that the OPEC deal was achieved because many OPEC countries feared a sharp decline in prices in 2017.
During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the oil output by 558,000 barrels per day during the meeting held Dec.10.
Eleven non-OPEC countries agreed to reduce the oil output: Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and Republic of South Sudan.
OPEC and non-OPEC countries pledged to implement the reached deal from Jan.1, 2017.
The expert believes that many of the OPEC members will adhere to their commitments, especially Saudi Arabia.
“The global oil market is oversupplied and has a large overhang of inventories,” said Gruso. “I believe it is highly unlikely that shortages would occur as a result of the OPEC agreement.”
The expert said the OPEC agreement already has impacted the market because if the cartel had failed to do anything at its December meeting, the oil prices would have declined considerably.
The deal probably added $8-10/barrel to the price of oil in the last month, he added.
“How long the price support lasts depends on the continued willingness of the producers to adhere to their quotas and the pace of global economic growth's impact on oil demand,” said Gruso.
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